TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>ITAT rules securitization trust not required to deduct TDS under section 194LBC on Excess Interest Spread payments to originator</h1> <h3>SME Pool Series V August 2016 Versus Income Tax Officer, (TDS) 2 (2) (1), Mumbai</h3> SME Pool Series V August 2016 Versus Income Tax Officer, (TDS) 2 (2) (1), Mumbai - TMI Issues Involved:1. Condonation of Delay2. Appellant being treated as 'assessee in default'3. Non-applicability of Section 194LBC of the Act4. Levy of interest u/s 201(1A) of the ActCondonation of Delay:The appellant sought condonation of a 50-day delay in filing the appeal, attributing it to the resignation of the associate/employee responsible for tracking income-tax notices. The Tribunal condoned the delay, citing the judgment of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC).Appellant being treated as 'assessee in default':The appellant challenged the CIT(A)'s order that treated it as an 'assessee in default' u/s 201/201(1A) of the Income Tax Act, 1961, for not deducting tax at source under Section 194LBC on the Excess Interest Spread (EIS) paid to the originator.Non-applicability of Section 194LBC of the Act:The Tribunal noted that Section 194LBC applies if income is payable to an investor in respect of investment in the securitization trust. The appellant argued that the originator was not an investor as defined under the Act because the originator did not hold any Pass Through Certificates (PTCs) or other securities/instruments. The Tribunal agreed, citing the decision in M/s Vivriti Cibus 013 2017 Vs. Income Tax Officer (TDS)-2(3)(3), Mumbai [ITA No. 3171/Mum/2022], which held that Section 194LBC is not applicable to EIS payments when the originator does not hold any investment in the securitization trust.Levy of interest u/s 201(1A) of the Act:The Tribunal deleted the demand of INR 4,21,30,230/- under Section 201(1) and INR 47,22,191/- under Section 201(1A), aggregating to INR 4,68,52,422/-, concluding that the appellant was not under obligation to withhold tax from the EIS payments to the originator.Conclusion:For both Assessment Years 2017-18 and 2018-19, the Tribunal allowed the appeals, holding that the provisions of Section 194LBC were not applicable, and thus, the appellant could not be treated as an 'assessee in default' nor liable for interest u/s 201(1A).
TaxTMI 
TaxTMI 
